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"We're still coming out of the worst economic downturn since the Great Depression," said Valero spokesman Bill Day. "This may not be the best time to implement costly regulations."

The EPA this month began regulating greenhouse gas emissions, but the State of Texas informed the federal agency it will not implement the new rules. As a result, the EPA set into motion a process to take over a portion of the Texas Commission on Environmental Quality's permitting program to issue them itself. The battle ended up in the courts.

Wednesday, the U.S. Circuit Court of Appeals in Washington, D.C., rejected a petition from Texas that sought to prevent the EPA from taking over the greenhouse gas permitting in Texas.

The greenhouse gas regulations come on the heels of a permitting problem that invalidated certain types of plant permits, leaving companies scrambling to obtain the proper paperwork.

Last year, the EPA declared flexible permits invalid.

A flexible permit is one that looks at the net emissions for a particular plant, rather than specifically setting emissions limits for each individual piece of equipment.

George Talbert, director of the Texas Air Quality Research Center, explained that the flexible permits were devised in 1994 to help older plants comply with federal clean air regulations and that they have helped bring down emissions level each year since.

"Ozone levels have come down over the years and are in attainment, so they have worked well," he added.

At the same time, the looming prospect of stricter ozone standards could mean more resources diverted to pollution control and away from production and the increased workforce that entails, said John Durkay, legal counsel for the Southeast Texas Plant Managers Forum.

Durkay said if new ozone regulations are too stringent, they could dampen the business environment in Southeast Texas.